West Pharmaceutical Services Inc (WST)
Debt-to-capital ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Long-term debt | US$ in thousands | 72,800 | 206,700 | 208,800 | 252,900 | 255,000 |
| Total stockholders’ equity | US$ in thousands | 2,881,000 | 2,684,900 | 2,335,400 | 1,854,500 | 1,573,200 |
| Debt-to-capital ratio | 0.02 | 0.07 | 0.08 | 0.12 | 0.14 |
December 31, 2023 calculation
Debt-to-capital ratio = Long-term debt ÷ (Long-term debt + Total stockholders’ equity)
= $72,800K ÷ ($72,800K + $2,881,000K)
= 0.02
The debt-to-capital ratio of West Pharmaceutical Services, Inc. has shown a decreasing trend over the past five years, declining from 0.14 in 2019 to 0.07 in 2023. This trend indicates that the company has been reducing its reliance on debt to finance its operations and investments relative to its total capital structure.
A lower debt-to-capital ratio generally suggests a lower financial risk for the company, as it indicates a lower proportion of debt in the capital structure compared to equity. In the case of West Pharmaceutical Services, Inc., the decreasing trend in the debt-to-capital ratio may signal an improving financial position and increased financial stability over the years.
It is important to note that a low debt-to-capital ratio does not necessarily mean that the company is in a better financial position, as certain industries or business models may require higher leverage to support growth opportunities. Therefore, further analysis of the company's overall financial health and business strategy is recommended to gain a comprehensive understanding of its capital structure and financial risk management.
Peer comparison
Dec 31, 2023